MS. PERINO: One announcement. President Bush continues to call on the
Senate to swiftly clear the pipeline of all pending nominations. Currently
there are 394 nominations pending in the Senate. These nominations
cumulatively represent more than 50,000 days of missed opportunity in roles
that are critical to our nation's security and prosperity. Most of these
nominations are for military promotions, career promotions, or
non-controversial appointments whose terms expire at the end of this
administration. And before leaving for its 4th of July recess the Senate
should fulfill its constitutional obligations to provide these pending
nominees a fair up or down vote. The President believes it's time for the
Senate to finally judge the President's nominees by their qualifications
and not by the political calendar.

With that, we'll take questions.

Q Consumer confidence dropped to its lowest level in 16 years. Clearly
people aren't satisfied by what the President has done to try to stabilize
the economy. What is the administration's reaction to this? And what can
you do?

MS. PERINO: I think you've got to take a step back. One, I think that,
first of all, we know that Americans are concerned about the economy; we
have been concerned about the economy. And the President worked very hard
to make sure that we put in place a stimulus package that was put in place
earlier in the year. And we made it clear then, and we have continued to,
that it's going to take a while for the stimulus to take effect.

We know that about 75 million Americans have received their checks --
that's about a little bit more than halfway through the process. There's
some evidence that they are spending that money, and that's what the
purpose was for, to -- people could do whatever they wanted with the money,
but our economists believed that they would spend it. But it's going to
take a while to see that reflected in economic numbers such as retail
sales.

We are confident that it will have the impact that we thought it would
towards the latter half of the year. We believe that the long-term
resilience of our economy is very strong. And Secretary Paulson, last
week, gave a speech in which he said -- and I consider him our best
authority on the issue -- that our economy is resilient, deep and
competitive, and that the long-term fundamentals are very strong, and that
if it were him, he would not bet against the U.S. worker, the U.S. economy,
or the U.S. financial system.

Q But when you did the stimulus package you weren't facing $4-a-gallon
gasoline, and that's been a tremendous shock.

MS. PERINO: Sure. Gasoline was certainly high, because it was around that
time that at least one reporter said that there might be $4 gasoline. So
higher energy prices have been having an impact. That's one of the reasons
that we're working to do something to send the market a signal that we want
to increase supply so that we can start to bring back into balance the law
of supply and demand.

It's going to take a while, and we've been very careful and cautious to
make sure that we tell people there's no magic wand that anybody can wave.
That's not just the President, but members of Congress, as well.

One thing that is happening on the energy front is an increase in
conservation here in our own country, which is to be expected when you have
higher prices. And that, coupled with aggressive research and development
into new technologies, like battery-powered vehicles, will get us into a
better position in the long run. But for the short term, it's important
that we make sure everyone understands there's nothing we can do overnight.

Q What does the President think about John McCain's $300 million reward
for somebody who comes up with a --

MS. PERINO: Haven't spoken to him about it, but obviously President Bush
has been very interested in pushing R&D. And I think that since 2001 we've
spent $21 billion on alternative fuel and efficiency type of technology.

And one thing that's very encouraging that the President has heard across
the board from the private sector is that venture capitalists are
increasingly investing in companies, entrepreneurial companies, that are
looking to the next wave of energy technologies, or the next wave of
vehicles that we'll be able to drive that, one, will be safe, but will also
run on -- less polluting vehicles and ones that don't use traditional oil
and gas.

Kathleen.

Q Dana, is the United States considering opening an interest section in
Iran? How close are we to reaching a decision on that, and why would the
U.S. do that?

MS. PERINO: Well, I think that Secretary Rice said it best yesterday when
she said that there might be some ideas out -- floating out there, but
there's nothing concrete at the moment. In regards to us reaching out and
talking directly to the Iranians, President Bush goes out of his way every
time he talks about the Iranian issue, which is often; he gets asked about
it and he brings it up proactively himself.

But our concern is not with the Iranian people. We respect them, we
respect their culture, we respect their heritage, we think that they are
good entrepreneurs. It's their regime that is continuing to isolate them
from the international community. The international community is speaking
with one voice in that regards, as well.

One of the things that we did last month was make sure that the incentives
package that was released from the U.N. Security Council -- I'm sorry, from
the EU plus 3 -- was the fact that we made that public so that everybody
can see -- and hopefully Iranians that are able to have access to the media
and have access to the Internet would be able to see that the United States
and its allies does not have any problems with them as individuals; that we
are actually wanting to work with the Iranians. We've provided a path
forward for civilian nuclear energy, and we want to have a relationship
with them. But their regime has to agree to halt the enrichment of uranium
before we can do that.

Q Is the administration interested in reaching out more directly to the
Iranian public? And would an interest section --

MS. PERINO: We've tried to --

Q -- potentially be a way to do that?

MS. PERINO: Well, I'll refer you to the State Department for any ideas
that are floating over there. But what I would say is that we seek
opportunities to talk directly to the Iranian people wherever and however
we can. And that includes sometimes through radio broadcasts, or through
Internet broadcasts, or through newspapers if we can, and also just by
speaking directly when the President is at a podium. Whenever he talks
about Iran, I think you can go back and look, that he always takes the time
and the care to make sure that he speaks directly to them.

Matt.

Q Can I follow that?

MS. PERINO: Sure.

Q Is it consistent with the idea of isolating Iran to open a U.S.
interest section there?

MS PERINO: I think that -- I don't know a lot about U.S. interest offices,
but I know that there's -- as I read, there's one in Cuba. So I think that
we've -- it's not unprecedented, and so I don't think it's inconsistent,
no. And again, this is directly for the people. Just like we don't have
any -- that we care very deeply for the Cuban people; we have a problem
with the regime -- the same is true when it comes to Iran.

Matt.

Q If Mugabe goes ahead with the runoff election in Zimbabwe, as seems
likely, would the United States consider the results of that election to be
null and void and to be an illegitimate ruler?

MS. PERINO: Well, I think that we already think that it's an illegitimate
government. We think that the MDC group won on March 29th, won that
election; however, agreed to a runoff election, as consistent with the
Zimbabwe constitution. I think anybody looking at this, given what the
Mugabe regime has said, that they were not going to allow for a free and
fair election.

And so what happened yesterday was the international community, through the
U.N. Security Council, spoke with one unified voice to say that the
problems that this regime has created can be solely laid at their feet.
And it was important that that be a presidential statement, the President's
statement out of the U.N. Security Council, because it has to be unanimous.
Remember, South Africa is a part of that 15.

I know that later this week, I think this weekend, the African Union, which
is currently chaired by President Kikwete in Tanzania, will be hosting a
meeting to talk about various issues, but Zimbabwe is going to be at the
top of that list. And the President praises the fact that many African
leaders have come out stronger in speaking out against the Mugabe regime,
and trying to push that -- put that pressure on the Mugabe regime so that
they would change their tactics. But we are obviously very concerned about
the violence that has taken place, and we remain concerned for the safety
of anybody of Mr. Tsvangirai's party.

Q It looks like the Dodd-Shelby housing bill is going to pass the
Senate. What's wrong with the bill as is, and what's a better alternative?

MS. PERINO: Well, I'd refer you to our -- we have a statement of
administration policy that we've put out which talks about it in detail.
We do think that there are some really good aspects of that Senate bill,
and we have been working closely with them to try to change the bill in a
way that we think it could be something that the President could sign.

A couple of things that we like are especially the section on GSE reform,
which would create a new regulator with appropriate authority over Fannie
Mae and Freddie Mac. So there are also aspects to the FHA modernization
that we think should be in the bill. It does ban risk-based pricing, which
we think is a mistake, so that's something that we would like to see
addressed in the conference.

The most significant concern that we have with the bill is that it would
provide for $4 billion to states to purchase already foreclosed homes. And
our concern is that that just helps the banks, that doesn't help the
consumers and the people who are trying to stay in the homes.

So I think that they're on the right path, in terms of working on a housing
bill that would help the American people, but these are significant
concerns, and I believe there's actually a veto threat that we have out
regarding the concerns that we have. But hopefully in Congress they will
be able to work something out. And we are working closely with them.

I was going to call you Laurent, but you are Olivier.

Q I am. I have a couple for you. First, you mentioned this morning the
President talked to President Karzai.

MS. PERINO: Yes.

Q Where are we on the President's suggestion of a border jirga assembly
to diffuse the tensions of Pakistan?

MS. PERINO: Well, I think -- look, President Karzai welcomed the idea, and
I think that the Pakistanis may have even started to compile a list of
names of people that would be a part of that jirga, but that it's not a
completed process yet.

Q Did that come up today and was that part of --

MS. PERINO: Yes. The President was updated on it.

Q Okay. And there's legislation running through the Congress now that
would give Filipino veterans some benefits. It cleared the Senate pretty
easily; it's now in the House. Does the President support that? Did that
come up in the meeting with President Arroyo?

MS. PERINO: I did not attend that meeting, so let me check and we'll get
back to you.

Les.

Q Thank you, Dana. Two questions. In the President's real hope that we
will have a presidential election that is fair to both sides, he was
concerned by what The Washington Times reported that one of the two
presidential campaigns sent a plane load of reporters back to Washington
while this candidate, without telling them, slipped away to stay in
Chicago, at which "several bureau chiefs and the Associated Press accused
him of deliberate deception." And my question: Without mentioning which
candidate did this, could you tell us if you have ever heard -- (laughter)
-- could you tell us if you ever heard of President Bush so mistreating
reporters during either of his two presidential campaigns?

MS. PERINO: I think that the reporters are going to have to take that up
with the presidential nominee that you are referring to. But I think you
have your facts wrong in terms of the legs of that trip.

Q The facts wrong? You reported -- that was The Washington Times.

MS. PERINO: Wrong flight, going the other way.

Q One of two major-party apparent nominees has also broken what The New
York Times reported as an earlier pledge to take public money, while the
other candidate noted, he is completely reversed himself and gone back not
on his word to me, but a commitment made to the American people. And my
question: If a presidential candidate will do such things before he is
either officially nominated or elected, does the President believe everyone
should be wary of such a candidate, or not? And if not, why not?

MS. PERINO: I think the President believes that the American people are
going to have to weigh all the issues, and that will be one of them, and
make a decision in November.

April.

Q Dana, back on Zimbabwe. Some are saying that the elephant in the room
is South Africa -- and has the President talked to Thabo Mbeki about this,
I guess, conflict for South Africa? Because Mugabe was once viewed as a
freedom fighter and helping them overturn apartheid, and they're kind of
keeping an allegiance with him. Has the President talked to Thabo Mbeki
about this?

MS. PERINO: Well, I don't know when -- I couldn't tell you when the last
time that they spoke, but obviously Secretary Rice has been in contact with
them. And I would point you back to the fact that this U.N. Security
Council President statement yesterday had to be agreed to unanimously
before it could be agreed to -- I'm sorry -- and released. And South
Africa was a part of that unanimous agreement. And I believe that the
international community spoke very clearly, with one, unified voice, and
laid the blame at the feet of the Mugabe regime, and condemned the
violence. And so South Africa was a part of the course that was shining a
light on the problems that we have with the Mugabe regime.

Q And on another subject, the President supports John McCain as far as
being the next President of the United States. But what does the President
and this administration say about one of McCain's inner circle saying that
a terrorist attack on this country would be a big advantage for McCain?

MS. PERINO: Again, I'm not -- I'm just not going to get into it and get
the President involved in disputes between the campaigns.

Q This administration has been fighting vigorously against terror on the
homeland. For him to say it's a big advantage, somebody that the President
supports his campaign, I mean --

MS. PERINO: I also saw that the individual who said that apologized. And
so I think I would point you to that apology.

Q Is the President's decision not to go to South Korea at all related to
the protests over the beef imports that have occurred --

MS. PERINO: The President said he wants to go to South Korea, and he still
may before the end of the year. But on this trip he's just going to go to
the G8. And I would actually say that we're closer to finalizing this
agreement on beef, and the U.S. Trade Representative feels very confident
that we'll be able to seal it before too long.

Q How much of a blow to any effort you might have made to get the trade
agreement passed with South Korea have the protests been? Has it really
pushed it off the realm of possibility at this point?

MS. PERINO: In terms of what Congress is going to do?

Q Yes, in terms of the administration making --

MS. PERINO: I think you have to ask Congress. I mean, we still believe
that a free trade agreement is essential for the people of South Korea. We
think it's a good deal for American consumers and businesses, and Congress
is -- continues to put up barriers to free trade agreements. We think that
that's wrong, but I haven't heard anybody say that the recent protests
regarding American beef that took place in South Korea have had much of an
impact on Capitol Hill. And I think that everybody has been working
towards -- very constructively to try to redo the package. That's what the
Trade Representative worked on, Susan Schwab, and she reports that we are
close to be able to finalizing this issue.

Q Doesn't the G8 usually have a side trip or two associated with it?

MS. PERINO: There are times that it could, but I would point out President
Bush is going to meet with President Lee in Japan while they're there for a
bilateral meeting.

Q And you said China is a possibility as to when you could tack on a
South Korea trip?

MS. PERINO: I wouldn't rule it out, but I'm not saying that it's for sure
going to happen then. But he is -- he does have additional foreign travel
this year.

Victoria.

Q The new GAO report, critical of progress in Iraq -- what's the White
House comment on that?

MS. PERINO: Well, I just think that you have to look at facts on the
ground in terms of the reporting. I don't know -- I don't know what the
parameters were for the GAO report. I think that from what I've read of
it, it's inconsistent with the reporting on the ground that I've seen --
that I've read from reporters of the news media who were there. And
certainly it doesn't -- it's not consistent with some of the facts that we
have here. And I would point you to the rebuttals that the State
Department and the Treasury Department provided to GAO, saying that they
thought that their report was way off-base.

Progress in Iraq is undeniable. And I think one of the things that you can
point to is not just the political and security gains, but certainly the
economic gains that they've had, as well. And we should all be celebrating
that and working towards it.

But we do have a lot more work to do. I mean, don't get me wrong, there's
-- we still have tens of thousands of troops there. They're in harm's way
and they need all the resources that they have requested -- the President
has requested on their behalf. And we are hopeful that the United States
Congress would be able to finalize that legislation and get the troops the
money they need before they leave for their next recess.

Goyal.

Q Thank you. Two quick questions. One, Dana, Indian parliament is now
trying again for the last -- as far as the U.S.- India civil nuclear
agreement is concerned. Do you think it's too late, or if President has
been briefed on this? And is the President trying his best to go -- get
through the Congress if it goes through the India parliament --

MS. PERINO: Well, we'd like to see progress in India and that would
certainly help our Congress, as well. But the President keeps regularly
updated on. He thinks it's a very important agreement.

Q And second, as far as Congressman Henry Waxman is concerned -- he said
that he has seen some evidence of Chinese munitions and arms in
Afghanistan. Can you confirm any --

MS. PERINO: Tom Casey, the spokesperson at the State Department, talked
about this earlier today. They've seen the allegations. They take them
seriously, and they said that they would be responding accordingly.